More Ethanol Firms Filing For Bankruptcy

Brazilian ethanol producer Infinity Bio-Energy says that falling prices and lack of credit have forced it to file for bankruptcy protection.

The company operates five mills in the states of Mato Grosso do Sul, Minas Gerais and Espirito Santo.

Earlier this week US leading producer Pacific Ethanol said that four of it's subsidiaries had also filed for Chapter 11 bankruptcy protection.

Earlier this week President Barack Obama introduced a new proposal to boost US fuel economy, suggesting that all passenger vehicles must be able to average 35.5mpg by 2016. Ethanol's lower energy content means that vehicles burning fuel blends with high inclusion rates such as E85 (85% ethanol:15% gasoline) get a lot less mpg. Typically 20-30% less according to some reports, making complying with this new proposal AND burning E85 impossible for many.

It seems that the best hope for the ethanol industry from here is to push for the inclusion level in normal gasoline to be hiked from 10% to 15% as soon as possible.