After only two years, Coskata is bull-dozing ahead toward its goal of producing cellulosic ethanol for less than $1 a gallon, holding the attention of not only a wide range of investors but the media as well.<br /> <br /> Gasification systems to turn waste into energy are gaining ground and Coskata uses just such a process coupled with anaerobic organism digestion to transform agricultural waste and other carbon containing cellulosic material such as switchgrass and wood chips into ethanol. It can also take in other inputs such as old tires and municipal solid waste. <br /&g... More >>

After only two years, Coskata is bull-dozing ahead toward its goal of producing cellulosic ethanol for less than $1 a gallon, holding the attention of not only a wide range of investors but the media as well.<br /> <br /> Gasification systems to turn waste into energy are gaining ground and Coskata uses just such a process coupled with anaerobic organism digestion to transform agricultural waste and other carbon containing cellulosic material such as switchgrass and wood chips into ethanol. It can also take in other inputs such as old tires and municipal solid waste. <br /> So how does Coskata differ from other gasificiation or ethanol producing companies? Well, its final output is pure ethanol, as opposed to a mix that has to be separated. Their process produces over 100 gallons of ethanol per dry ton of feedstock (which is a lot for a cellulosic ethanol plant) - this not only reduces feedstock cost, but also reduces nearly all other costs on a per gallon basis. Coskata\\\'s process is also significantly less taxing on water resources. While other current methods of ethanol production take 3 to 4 gallons of water for each gallon of fuel produced, the Coskata process needs less than a gallon of water per gallon of fuel. Finally, there is little pre-treatment required for inputs. Though $1 a gallon may be a bit of a stretch as an estimate, it is certainly a worthy goal. Even if these technology differentiators can bring down production costs to $2 a gallon, Coskata would still be pretty well placed.<br /> <br /> But what really differentiates Coskata are its connections and business plan. It recently announced a partnership with the state of Florida and US Sugar to build a 100 million gallon per year plant to process sugarcane remnants in the middle of the everglades as part of Florida's effort to expand conservation and received funding from GM in January 2008 for its continued research. It further is preparing for a business model that includes licensing of technology, rather than building more and more power plants itself. This will further reduce the capital intensity while providing a road to growing revenues if the pilot plants go well.<br /> <br /> Of course, the GM money might not be renewed next year, but there are plenty of other investors in line. The company pulled in $40 million in December 2008 despite the recession. The Series C round was led by the Blackstone Group, through a venture funding arm and included support from prior investors such as Advanced Technology Ventures, Great Point Ventures and Khosla Ventures.<br /> <br /> I am a strong supporter of companies turning waste into energy, especially if the energy can be produced in a place that doesn't require much transportation. Coskata is on the right track.<br /> <br><span class=\"add_review\">On 12/31/2008, Ghazal added:</span><br> I would like to thank Daniel and Jake for starting quite a debate! <br /> <br /> I am the first to agree that ethanol is not the future. Ethanol based on corn is totally crazy and has only been supported domestically because of the fabulously powerful agricultural lobby. <br /> <br /> But as I said in my original review, I like the idea of transforming waste to energy and I have a special fascination with gasifiers: put agricultural waste / household trash / tires in one end and get fuel out the other? amazing. I think this type of waste to energy does have a place in the future energy mix.<br /> <br /> Thanks to Jake for unearthing some of the financial estimates for Coskata - I had not seen these before. I agree that the cost efficiencies are not there now. I am optimistic about cost coming down with further technological refinement, but would drop a star based on these numbers. << Less