Company Mascoma makes ethanol from wood--at small scale

Mascoma said on Wednesday that a demonstration facility is making ethanol from wood chips and other non-food sources, bringing cellulosic ethanol a step closer to commercialization.

The test facility in Rome, N.Y., uses different feedstocks, including wood and grasses. Production is at a rate of 200,000 gallons per year. Mascoma didn't disclose the yield, or how much biomass is converted into fuel.

The company is testing two methods for making ethanol: a traditional enzyme-based process and one using a genetically modified microbe designed to make the conversion cheaper.

Mascoma is one of a handful of upstart companies developing different technologies to convert wood chips and other non-food biomass into ethanol, which is an additive to gasoline.

Because of the economy and disrupted financial markets, non-government funding for cellulosic ethanol pilot facilities has become harder.

At the upstate New York facility, Mascoma said that it is benefiting from state grants aimed at promoting renewable energy businesses.