Iogen, a Canadian biotech company, released its first commercial shipment of bioethanol . Unlike conventional ethanol which is made from grain, bioethanol is made from cellulose-rich biomass such as wheat straw, sugar-cane bagasse, and corn stovers and stalks left over after harvesting.

Critics say conventional grain-based ethanol requires as much energy to produce as it releases when burnt, once inputs like tractor gas and pesticides have been accounted for. The net energy benefit from cellulose ethanol is not in dispute.

Iogen’s breakthrough was the successful use of recombinant DNA-produced enzymes to break apart cellulose to produce the sugars that are used to make the ethanol. This technology could refine the more than 500 million dry tons of biomass annually represented by wood-product manufacturing residues, municipal solid waste and garden waste into more than 50 billion gallons of ethanol, according to the Biotechnology Industry Organization .

Ethanol currently is used in a variety of ways -- most commonly as an additive to increase octane and improve the emissions quality of gasoline. (California has replaced MTBE with Ethanol in its specifications for gas.) In some areas of the United States, ethanol is blended with gasoline to form an E10 blend (10% ethanol and 90% gasoline), but it can be used in higher concentrations such as E85 or E95. Original equipment manufacturers produce flexible-fuel vehicles that can run on E85 or any other combination of ethanol and gasoline. -- US DOE Alternative Fuels Data Center

(As an aside, the first E85 pumping station within the Washington, DC, Beltway just opened.)

The catch so far is that ethanol costs more to produce than does gasoline. Critics say it would not reach the market without subsidies. The Canadian Petroleum Products Institute has opposed the use of government subsidies to support bioethanol.

Those economics may change sooner than originally projected.