Several companies have had to delay or scale back plans for cellulosic ethanol plants. For example, Range Fuels, based in Broomfield, CO, announced in 2007 that it expected to open a 20-million-gallon-per-year commercial facility in 2008, but it's pushed that back to this year and reduced the capacity to 10 million gallons. "The economic downturn severely constrained progress on commercializing cellulosic biofuels," says Range Fuels CEO David Aldous. "The downturn restricted access to capital, which put a number of commercial cellulosic biofuels plants that had been announced in 2008 on hold."

Mascoma, based in Lebanon, NH, has built a 200,000-gallon-per-year demonstration plant in New York, but it was initially intended to have a capacity of about half a million gallons per year. Plans for a plant that would produce 20 to 40 million gallons a year in Michigan are being delayed from 2012 to 2013 because of trouble securing financing, in spite of government help.

ZeaChem's Imbler says the recession is actually helping in some ways, by decreasing the costs of materials and making it easier to hire good workers. The company's strategy for making the business a financial success and attracting investment for commercial scale plants is to start by producing ethyl acetate, which "takes about half the equipment and sells for twice the price of ethanol, so it's an ideal starter product," he says. Other biofuels companies are taking a similar approach--looking for high value products to offset high costs, at least initially. ZeaChem plans to incorporate the technology into an existing corn ethanol plant for commercial production of ethyl acetate. "If all goes well, that plant could be in operation by the end of next year," he says. A stand-alone commercial cellulosic ethanol plant would follow. It could switch between selling acetic acid, ethyl acetate, or ethanol, depending on the market.