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LONDON (Reuters) - A European Union target to limit warming of the planet to no more than 2 degrees Celsius may not be technically achievable, the International Energy Agency said in a report to be published next week.

"Even leaving aside any debate about the political feasibility ... it is uncertain whether the scale of the transformation envisaged is even technically achievable, as the scenario assumes broad development of technologies that have not yet been proven," said the IEA's World Energy Outlook.

That analysis referred to a target to limit global warming to no more than 2 degrees.

The implication is that the world may have to accept higher warming limits than targeted at present, for example by the EU since 1996, and prepare for effects which scientists say will include more droughts, floods and rising seas.

A United Nations climate panel said last year that above 3 degrees "hundreds of millions of people (would be) exposed to increased water stress (shortages)."

Stronger action to fight climate change involves rapidly escalating costs, for example to deploy expensive, untested technologies such as carbon scrubbers and even to leave stranded assets -- where high-carbon coal plants, for example, have to be closed prematurely.

"It will be necessary to face up to the reality of the cost of early capital retirement if radical measures are to be taken ... to deliver deep cuts in emissions," the IEA said in its report, due to be published on November 12. The IEA is energy adviser to 28 industrialized countries.

The IEA analyzed two scenarios to limit warming to 2 degrees and 3 degrees, and estimated that these would cost about $180 and $90 per tonne of carbon dioxide emissions respectively.

The present EU carbon price is about 18 euros ($23.20), and accounts for about one fifth of European consumer electricity prices, say analysts.

"The scale of the challenge ... is immense," the IEA said of a 2 degrees target. "The technology shift, if achievable, would certainly be unprecedented in scale and speed of deployment."

The EU Council of Ministers stated in 1996 that it "believes that global average temperatures should not exceed 2 degrees above pre-industrial level."

The Maldives will begin to divert a portion of the country's billion-dollar annual tourist revenue into buying a

The highest land point on the Maldives is only 2.4 metres above sea level. Photograph: Corbis/Craig Tuttle

Unless based on respect for the rights of indigenous peoples and forest communities, efforts by rich countries to combat climate change by funding reductions in deforestation in developing countries will fail, and could even unleash a devastating wave of forest loss, cultural destruction and civil conflict, warned a leading group of forestry and development experts at a recent meeting in Oslo.

The experts are gathering in Oslo with policymakers and community leaders for a conference on rights, forests and climate change. The conference was organized by two non-profits, Rainforest Foundation Norway and the US-based Rights and Resources Initiative (RRI).

Speaking at the meeting, Norway's Minister of Environment and International Development, Erik Solheim, says efforts towards reduced emissions from deforestation in developing countries should be based on the rights of indigenous peoples to the forests they depend on for their livelihoods, and provide tangible benefits consistent with their essential role in sustainable forest management.

"In addition to reducing emissions from deforestation and forest degradation, early action, pilot projects and demonstrations should safeguard biodiversity, contribute to poverty reduction and secure the rights of forest dependent communities in order to achieve any degree of permanence, legitimacy and effectiveness," said Solheim.

Deforestation is responsible for about 20 percent of global greenhouse gas emissions, and reducing it is seen as one of the quickest and cheapest ways of cutting emissions.

"Moves to finance reductions in tropical deforestation and forest degradation are necessary and welcome," said Andy White, Coordinator of RRI. "But on their own they won't solve the problem. Poorly devised, they could even make it worse. If such initiatives are well designed they can not only secure carbon but present a global opportunity to address the underlying causes of poverty and conflict in many developing countries."

Globally, climate change negotiators are considering the introduction of a new financial mechanism, known as Reduced Emissions from Deforestation and Forest Degradation (REDD), that could generate billions of dollars for reducing forest loss in the tropics. Meanwhile, the Government of Norway has already pledged up to 3 billion Norwegian kroner annually (US$ 500 million) to cut emissions from deforestation and forest degradation in tropical countries.

"To achieve long-term reductions in deforestation and forest degradation, it is absolutely necessary to respect and strengthen the rights of indigenous and other forest dependent communities," says Lars Løvold, director of Rainforest Foundation Norway. "Many of these schemes are still being developed, and major decisions on how to spend the money will be made in the next few years. For us, the question is whether this money will result in a great deal of good or a great deal of harm to the environment and forest communities."

Previous attempts to reduce deforestation and forest degradation have largely failed, often due to a lack of attention to human rights, property rights and transparency.

"There are growing conflicts between indigenous peoples and both forestry companies and conservation organizations. Imposed forest management initiatives are only viable if they respect the customary rights of forest peoples and ensure they have control about what happens on their lands. Indigenous peoples must be accepted as full and fair participants in all climate negotiations," said Joji Carino, Director of TEBTEBBA, the Indigenous Peoples' International Center for Policy Research and Education.

Conference organizers worry that REDD could fuel corruption and provoke tensions and land grab situations unless good governance, policies and the rule of law are first put in place.

"Indigenous peoples are rightly concerned about how these new investments could affect their access to the forests that they depend on for their livelihoods," Solheim noted. "This is precisely why we are fully supportive of a role for indigenous peoples and other forest dependent communities in the development and monitoring of climate plans and investments at the national and global level. These rights need to be respected, not just for moral reasons, although that is vital. It is also a matter of pragmatism and effectiveness."

Experience from Brazil, the country in the world with the most advanced monitoring of its forests, gives valuable insight to the discussion on how forests can be protected. According to research from the Brazilian NGO Instituto Socioambiental, 19 percent of unprotected forest areas in Brazil have been deforested, while deforestation inside federal national parks is 2 percent. In indigenous territories, however, only 1.1 percent have been deforested.

The Oslo conference will discuss the Four Foundations for Effective Investments in Climate Change:

Recognize rights - establish an equitable legal and regulatory framework for land and resources.

Prioritize payment to communities – ensure that benefits and payments prioritize indigenous and local communities, according to their potential role as forest stewards.

Establish independent advisory and auditing processes to guide, monitor and audit investments and actions at national and global levels.

Monitor more than carbon to keep track of the status of forests, forest carbon, biodiversity and impacts on rights and livelihoods. Secure a role for indigenous peoples in monitoring of emissions, making full use of their knowledge of the state of forest ecosystems, something which could be particularly relevant to keep track of forest degradation.

New research to be presented at the conference demonstrates that the costs of recognizing local rights and tenure systems are low relative to the projected costs of REDD, and that indigenous and other forest communities own or manage a major portion of the global forest carbon stock. The research also shows that communities have proven to be good stewards of the forest.

A new study by RRI and Intercooperation, a Swiss development organization, finds that the average direct cost to legally recognize traditional community tenure rights is around $3 per hectare – an insignificant investment to make when the minimum estimates needed to pay for elements of a global REDD scheme are somewhere between $800 and $3500 per hectare each year for the next 22 years.

Another study that will be released at the conference, by Professor Arun Agrawal of the University of Michigan, uses data from 325 sites in 12 countries to show that community ownership of forests provides the best possibility for increasing carbon stocks and improving livelihood outcomes. This is the most robust research to date at a global scale on the relationship between forest tenure and carbon sequestration, livelihood benefits and biodiversity.

Agrawal's study also finds that the larger the property owned by communities, the better the chances for maintaining and sequestering carbon. This research shows the tremendous scope for cost-effective investments that strengthen local land rights, reduce poverty and conflict, and protect remaining natural forest areas.

To help ensure effective investments to combat in climate change, Rainforest Foundation Norway and RRI have called for the formation of independent bodies to advise and monitor the UN Convention on Climate Change.

"We believe that such advisory functions should be given serious consideration," said Solheim. The conference will take up this recommendation and consider how to best move forward in its deliberations.

Major decisions on REDD, as well as other measures to combat climate change, are likely to be made at the 15th Conference of the UN Convention on Climate Change, which will be held in Copenhagen, Denmark, in 2009.

"In the next fifteen months, the world will have to make a choice," said Løvold. "We can continue to ignore the legitimate rights of forest dwellers, which will exacerbate conflict in forests and make REDD ineffective. Or we can learn from the lessons of the past, recognize the property and human rights of forest dwellers, and almost immediately start reaping the benefits."

OAKLAND, Calif. -- Commercial real estate executives are increasingly seeking greener office space -- and are less inclined to pay premiums for it, according to a recent survey by CoreNet Global and Jones Lang LaSalle.

"They are less willing to pay a premium for sustainable space because they understand that is doesn't cost the owner more to make that space efficient," said JLL Senior Vice President Michael Jordan.

Jordan and CoreNet Global Vice President Eric Bowles detailed the findings of the survey in a teleconference Monday, the same day the study was presented at a CoreNet summit in Orlando, Fla.

More than 400 commercial real estate executives were surveyed in September and October in the study for commercial real estate services giant JLL and CoreNet, the leading international trade group for corporate real estate and workplace executives. Results were compared with those obtained a year earlier in a similar study.

The survey this fall found that more commercial real estate executives than ever — some 69 percent compared with 47 percent in 2007 — have "embraced sustainability" and view it as a critical issue, said Bowles.

In addition, 40 percent identified sustainability and energy as major factors in their companies' location decisions, and another 36 percent said those attributes are "tie-breakers" when considering competitive sites.

While the importance placed on green office space has increased, so have expectations of obtaining high performance work environments without paying high prices.

Forty-two percent of the executives surveyed this year said they are willing to pay a premium — typically of 1 to 5 percent — to lease green work space, and 53 percent said they would pay a premium to retrofit property they own to increase efficiency. In the 2007, 77 percent of those surveyed said they were willing to pay a premium for environmentally friendly space.

Jordan and Bowles attributed the change to execs becoming more savvy about the costs and benefits of building sustainability, rather than a reflection of tough economic times.

More executives now approach location decisions with the expectation that "sustainable buildings should be cheaper to use and (therefore) cheaper to rent," Jordan said.

And for owners of commercial real estate, the internal dialogue about green office space goes something like this, "I don't have to pay extra. If I design it better up front, I can deliver it cheaper," Bowles said.

Decision-makers about locations also strongly consider employee satisfaction and productivity in evaluating worksites, the survey showed.

And looking ahead, Bowles and Jordan said they expect companies' workplace strategies to further drive the demands for green office space and "the flight to quality" in commercial real estate.

The survey showed that 40 percent of the firms queried are charting "sustainability data" — chiefly the costs and benefits associated with energy efficiency — and 30 percent are collecting data in some form related to green workspace.

The top three measurements involve energy, employee health and productivity, and employee satisfaction, Jordan said.

With such measurements becoming more prevalent, the commercial real estate industry should expect greater demands for eco-friendly building services as the desire for green work environments goes beyond the basics of bricks-and-mortar issues  — and extends to support services and maintenance for office space, Bowles and Jordan said.

As producers of ethanol navigate a triple whammy of falling prices for their product, credit woes and volatile costs for the corn from which ethanol is made, an economic version of “Survivor” is playing out in the industry.

Last week, VeraSun, one of the nation’s largest ethanol producers, announced that it had filed for bankruptcy protection after its bets on the price of corn turned out to be wrong — and costly.

VeraSun, a large ethanol producer, filed for bankruptcy protection last week.

Several other small producers have filed for bankruptcy this year, and construction plans for several Midwestern ethanol plants have been postponed or shelved. Shares in the handful of publicly owned ethanol companies have mostly been slumping all year. Aventine Renewable Energy and Pacific Ethanol, for instance, have both lost more than 80 percent of their value since the beginning of the year.

While producers pin their hopes on rising government mandates for the use of ethanol, analysts who follow the industry voice concerns that more companies could go under. They expect a wave of consolidation to sweep the ethanol business once the credit crisis eases.

Ian Horowitz, an analyst with Soleil Securities, said that he was particularly worried about BioFuel Energy, an ethanol maker. The company, based in Denver, is low on cash and has had problems similar to VeraSun’s, losing $46 million when commodity-price hedges turned out badly.

“Like the airlines, sometimes one goes in, the others run to go in, too,” said Mr. Horowitz, speaking of bankruptcy protection.

BioFuel Energy’s shares have fallen to 57 cents, from a high of $7.75 in January. The company did not respond to requests for comment.

Archer Daniels Midland, the agribusiness giant that is one of the largest ethanol producers, reported higher overall profits on Tuesday — but recorded a sharp drop in operating profit for its corn processing unit, which includes ethanol production. The company, which also announced a new $370 million investment in Brazilian ethanol made from sugar cane, is far more diversified than its smaller competitors who are focused on ethanol.

Nowadays, gasoline sold at many stations nationwide includes about 10 percent ethanol, with a few stations in the Midwest selling an 85 percent ethanol blend. Many politicians have embraced ethanol as a way to court farmers and because it is produced domestically. Most research suggests that corn ethanol offers modest benefits in lowering emissions of climate-altering greenhouse gases, though production of ethanol has contributed to rising food prices.

The federal government began mandating the use of ethanol in a 2005 energy bill, setting off a building boom in ethanol plants. A 2007 energy bill substantially raised the quotas, which will require 10.5 billion gallons of ethanol next year and 12 billion gallons in 2010.

Energized by strong government support and a profitable year in 2006, the industry redoubled its building spree. High gasoline prices also encouraged refiners to use more of the cheaper ethanol over the past year. In August, nearly 50 percent more ethanol was produced than a year earlier, and many more plants were on the drawing boards.

But then ethanol companies got a rude shock: corn prices hit record highs this summer after the Midwestern floods. That made ethanol more expensive to produce. Fearing that prices would go even higher, some producers — including VeraSun, BioFuel Energy and Glacial Lakes Energy, a South Dakota farmers cooperative — entered into contracts intended to protect them if corn prices rose.

“We were hearing $8, $9, $10” a bushel, said Jim Seurer, the interim chief executive of Glacial Lakes. “We sought protection from that.”

But after the fields dried and it became clear the nation would have a good corn harvest, the market turned again. Companies that had locked in around $7 and above were stuck watching corn fall to $4 a bushel.

In a statement last month, Mr. Seurer’s company reported “significant margin and hedging losses due to the sharp downturn in the price of corn.”

Fewer than 10 of the country’s ethanol plants have stopped operating, according to Matt Hartwig, a spokesman for the Renewable Fuels Association, an industry group. But construction times have slowed and some plants in the planning stage have been halted.

Falling ethanol prices have compounded the squeeze on producers. These roughly track gasoline prices, and are down by nearly 40 percent since June, despite a recent uptick.

On top of all that came the credit freeze, which hurt companies that needed operating loans. With companies’ share prices falling, it became difficult to raise investment capital, too. VeraSun, for example, sought to issue 20 million shares to raise money, but that failed and it was forced to file for bankruptcy protection.

A few months ago Glacial Lakes, the South Dakota cooperative, failed in its efforts to obtain financing from a group of banks, including some Wall Street lenders, Mr. Seurer said. It is asking its members — many of them farmers — for $11.3 million more to cover operational costs.

Ethanol “has been hit much harder than most other industries,” said Kevin Calabrese, an analyst at Argus Research, citing the volatility in corn and natural gas prices, the two main inputs for making ethanol.

The credit crisis will also prevent consolidation that otherwise would be expected in a hobbled industry, experts say.

“The industry should be consolidated — I think everybody believes that,” said Mr. Horowitz of Soleil. “But who is going to finance anything right now, let alone a very low-margin business that doesn’t look like it’s going to get better in the near term?”

Some are more optimistic, in part because of lower corn prices.

“The future of the industry looks very bright,” said Ronald H. Miller, president and chief executive of Aventine, citing the rising federal quotas for producing ethanol.

But he characterized the current environment as “choppy.” Aventine lost about $30 million earlier this year on certain securities, and recently delayed construction on a Nebraska plant to stretch its cash.

VeraSun, whose 14 operational plants account for 13 percent of the nation’s ethanol production capacity, announced on Tuesday that it was indefinitely delaying construction of a new plant in Minnesota, its second plant in that state to be delayed. VeraSun hopes to emerge from bankruptcy as an intact company, but it is possible the company will be sold off in pieces.

Thousands of tonnes of rubbish collected from household recycling bins may have to be stored in warehouses and former military bases to save them from being dumped after a collapse in prices.

Collection companies and councils are running out of space to store paper, plastic bottles and steel cans because prices are so low that the materials cannot be shifted. Collections of mixed plastics, mixed paper and steel reached record levels in the summer but the “bottom fell out of the market” and they are now worthless. The plunge in prices was caused by a sudden fall in demand for recycled materials, especially from China, as manufacturers reduced their output in line with the global economc downturn.

Local authorities and collection companies are so concerned about the mountains of paper, plastic bottles and cans that they are having to store that they have called for storage regulations to be eased.

Officials from the Environment Agency and the Department for Environment, Food and Rural Affairs are considering changing the regulations on the storage of recycled waste and are expected to issue new guidelines next week. They have been urged to relax the rules limiting the quantity of waste that can be stored and to allow it to be kept in secure warehouses or abandoned military bases and former airfields.

Steve Eminton, of letsrecycle.com, said: “Warehouses around Britain could start to be filled with waste paper, metal and plastic bottles. There's nowhere for these materials to go at the moment. It's rapidly becoming a very serious problem.”

He said that mountains of plastic bottles, paper and steel cans were likely to build up by the end of the year and that the problem would be exacerbated by the Christmas festivities, when a surge of packaging materials and drinks containers would fill recycling bins.

The speed at which prices collapsed has taken the recycling industry and local authorities by surprise and has been made worse because recycling rates are at record levels.

Jane Kennedy, the Environment Minister, will announce this morning that more than 90 per cent of local authorities are meeting or exceeding their household recycling targets. East Lindsey District Council has the highest recycling rate, with 58.4 per cent of all household rubbish, and 18 other authorities exceeded 50 per cent.

Stuart Foster, of Recoup, which advises on plastic recycling, said that mixed plastics had slumped from about £200 a tonne to the point of worthlessness in only four weeks. He was confident, however, that the low value would be temporary as at least three mixed-plastic facilities will open next year, reducing the nation's dependence on Chinese demand.

Mr Foster urged officials to be flexible on the regulations and said that with sensible management the plastic, paper and steel could be stored safely until prices rise. “We think there's light at the end of the tunnel but it's going to take some work,” he said.

Staff at Waste Resources Action Programme (Wrap) and the Local Government Association have begun investigating the extent of the problem.

A spokesman for the Local Government Association said: “The credit crunch has caused prices to fall in the materials and market and clearly this potentially has implications for councils.”

Steve Creed, of Wrap, said: “We think the current extremely low prices are likely to be temporary. Recovered materials are still a valuable resource. They have undergone similar price volatility in the past.”

Do your tires give you decent mileage? This week, the European Union proposed taking away the guesswork.

E.U. regulators have asked manufacturers to put a sticker on each of their tires similar to the labels frequently found in Europe rating a dishwasher or a clothes dryer.

The ratings start at “A” — colored green for greatest efficiency — and run to “G,” which is color-coded red for least efficiency. The efficiency ratings will be accompanied by ratings for grip — also A to G — and noise level, indicated by decibels.

According to the E.U., drivers can reduce their fuel bills by up to 10 percent if they choose the most efficient set of tires over those that would have the lowest ratings on the market. And increased use of efficient tires could mean fuel savings equivalent to the annual oil consumption of Hungary.

Carbon dioxide savings could amount to 4 million tons, or the equivalent of removing 1.3 million passenger cars from the roads each year, the regulators said.

Big tire makers are unhappy with the idea of stickers.

This sticker would tell European consumers how tires are rated in three categories: grip, noise, and efficiency. Tire makers are opposed to using them

According to the European Tire and Rubber Manufacturers’ Association, customers will not physically see the tire, and presumably the sticker, before it is taken out of the warehouse and fitted to their car. The “measure will not have the desired effect,” warned the association, which includes members like Continental and Michelin.

The E.U., though, said the ratings also would have to be shown in catalogs, leaflets and online marketing, giving customers other opportunities to make an informed choice.

Perhaps another reason that the tire makers are unhappy about the stickers is that consumers could start demanding tires that perform well in all three categories –- efficiency, grip and noise –- thereby forcing tire companies to produce all-around better products, and oblige them to be more competitive.

This week the tire makers warned that the rules could create a bigger market for cheaper, lower-performing tires smuggled in from outside the trade bloc. As a result, the association said there needed to be “robust verification mechanisms in each member state to protect both industry and consumers from the less scrupulous producers and importers.”

SAN FRANCISCO -- From Southern California to Maine, the foundering economy, high fuel prices and poor fishing have driven boat owners to abandon perhaps thousands of vessels on the waterfront, where they are beginning to break up and sink, leaking oil and other pollutants.

Sgt. Doug Powell with the Contra Costa County Sheriff's marine services unit, looks over the water by an abandoned commercial vessel in Fisherman's Cut near Bethel Island, Calif., Wednesday, Oct. 22, 2008. From Southern California to Maine, the foundering economy, high fuel prices and poor fishing have driven boat owners to abandon perhaps thousands of vessels on the waterfront, where they are beginning to break up and sink, leaking oil and other pollutants. Boats have long been a barometer of consumer confidence, disposable income and the state of the economy. (AP Photo/Eric Risberg)

Boats have long been a barometer of consumer confidence, disposable income and the overall state of the economy. Now, marina and harbor officials are reporting a sudden increase in the past year in the number of deserted pleasure boats and working vessels.

In Antioch, a town about 45 miles east of San Francisco, harbormaster John Cruger-Hansen showed up at his marina one day last spring to find the horizon changed overnight. On the San Joaquin River, he saw an old crane, a rusted barge, a tugboat and an assortment of other junked boats, all of which had been hauled in and left illegally.

"Boating is a pure luxury and one of the first things to go when the economy turns south," said Cruger-Hansen, who expects to see more abandoned boats by year's end. "If it comes to the point of putting food on the table or paying the boat slip fee, it's the boat that goes."

Unlike cars, wooden and fiberglass boats have virtually no scrap value. So rather than pay the high cost of hauling their boats to the dump, people ditch them or sell them for as little as $1 to anyone who will take them. The boats often break up and go under, or pass into the underground economy of nighttime scuttlers- who, for a fee, remove traceable identification numbers, strip out salvageable items and sink the vessels.

"Oil, gasoline and sewage from these boat leaks into the aquatic environment," said Sejal Choksi, program director at San Francisco Baykeeper, an environmental organization. Boat paint often contains chromium, lead, mercury and other toxic chemicals, and as a vessel deteriorates, the coating flakes off and settles on the sea floor or river bottom, where fish swallow it, Choksi said.

Government officials and environmental groups are calling for more programs and funding to prevent and clean up the junkyard flotillas.

But removing just one sunken sailboat can cost upwards of $12,000, and taking away larger commercial vessels is even more expensive.

With nearly a million registered boats, California - the second-largest boating state behind Florida - spends about $500,000 each year removing deserted recreational boats. The state has no money to remove commercial boats, and unless they are leaking oil or blocking a navigation channel, the Coast Guard is not required to take them away.

"At the state and federal level something needs to be done with these derelict commercial vessels. They just sit there, falling apart," said Contra Costa County sheriff's Sgt. Doug Powell, who patrols the mouth of the San Joaquin-Sacramento River Delta. Nearly 30 decaying tugboats, fishing boats, cranes and barges make up the aquatic junkyard in Powell's county.

High fuel prices and several disastrous years in the nation's fishing industry have led fishermen to desert salmon boats in Washington state, crab boats in Maryland, trawlers in Oregon and lobster boats in Florida.

In Georgia, Charles "Buck" Bennett, a natural-resources enforcement manager for the state, regularly finds wooden shrimp boats run aground and left to break apart in the Atlantic Ocean swells.

"I'm not an economist, but when putting 500 gallons of fuel in a shrimp boat costs more than the boat is worth, that is a sad thing," Bennett said.

Bennett keeps a growing list of broken down boats slated for removal, currently 152 statewide. But with lean economic times and a declining shrimp industry, he guesses there are hundreds more hidden along the state's shoreline and waterways.

It's not just barnacle-laden junkers that are being abandoned.

In recent months, an increasing number of powerboat and sailboat owners have been failing to pay their slip fees, according to Randy Short, chief executive of Almar Management Inc., a company with 16 luxury marinas in California and Hawaii.

When the payments are 40 days delinquent, the marina chains the boat to the dock. Recently, a boat owner in one of Short's Southern California marinas disappeared, leaving behind a $200,000 boat and no contact information.

"People get financially upside-down and ditch their boats," Short said, "and you can just forget trying to sell a power boat right now. No one is buying."

The red and blue flashing lights of the police are going green as the cars get a makeover.

The new, flatter, LED lights are set to save up to $800,000 a year in fuel. Not only will the lights have less wind drag, they will last longer.

The changes are part of a livery makeover that includes standardising the look of the police fleet, with a phasing out of the orange colour that denotes traffic vehicles from frontline cars.

The Fire Service will also be getting an updated look and will be introducing blue on its fire engines.

Is fuel efficiency really what we need most desperately? I say that what we really need is a car that can be shot when it breaks down.
Russell Baker

Process*: Raw biomass is typically ground up and pretreated in an acid steam bath before soaking in a massive hot tub for several days. Enzymes break down rigid cellulose into simple sugars like xylose, similar to the sweetener in toothpaste, which can be fermented by yeast or bacteria; it is then distilled into fuel-grade ethanol. Bottom Line: Fermenting cellulose currently involves a lot of water and several time-consuming steps, adding to expense. The first commercial facility is expected to open in Iowa by late 2011. Innovators: Iogen (backed by Shell), POET, SunEthanol, Verenium Freshwater Usage:** 3 gallons Energy Yield***: 66%

Process*: Cornstalks, garbage and even old tires are blasted with several-thousand-degree heat in an anaerobic chamber. With no oxygen, biomass can’t combust. Instead, feedstocks break down into carbon monoxide, hydrogen and carbon dioxide. This synthesis gas, or syngas, is cleaned, cooled and either ingested by bacteria or mixed with catalysts to produce ethanol and other alcohols. Bottom Line: This method uses substantially less water and provides greater yields, but it has yet to be scaled to levels that compete with the ethanol fermentation industry. Plants are set to open in Pennsylvania and Georgia in late 2009. Innovators: Coskata (backed by GM), Range Fuels Freshwater Usage:** 1 gallon Energy Yield***: 66%

Process*: Specially selected or genetically modified strains of algae are grown in enclosed bioreactors—tubes or plastic bags filled with water—and fed waste CO2 from heavy emitters like coal-fired power plants, cement kilns or breweries. The algae are then separated from water by centrifuge, and the oil is extracted with a solvent. It is then processed in Bottom Line: Algae produce thousands of gallons more oil per acre than crops such as soy or palm, but growing and processing them at scale still present challenges. A number of U.S. facilities are slated to come on line by 2012. Innovators: GreenFuel, HR Biopetroleum (backed by Shell), Solazyme, Solix Freshwater Usage:** None Energy Yield***: 103%

Process*: Simple sugars—either derived from breaking down tough, cellulosic feedstocks or from sources such as sugarcane—are reacted over solid catalysts to remove the oxygen locked inside their molecules and form high-energy hydrocarbons. Like crude run through traditional refineries, raw sugar feedstocks are separated to create the range of molecules in the fuels we know as gasoline, diesel and jet. Bottom Line: Green incarnations of today’s fuels are the holy grail, but until cellulose can be cheaply converted to simple sugars, domestic potential will be limited. Virent hopes to have its gas in car tanks by 2012. Innovators: Virent (backed by Shell and Honda) Freshwater Usage:** None Energy Yield***: 100%

Process*: Like ethanol, biobutanol is fermented by microorganisms from sugars, which are broken down from raw feedstocks and mixed with water. But for this process, the microbes have been genetically modified to produce an alcohol with a longer chain of hydrocarbons. Since butanol doesn’t mix with water at high concentrations, the finished fuel can be stored easily and transported within existing gasoline pipelines. Bottom Line: Butanol is the rocket fuel of alcohols, but it has traditionally been derived from petroleum. Plants to produce it cheaply from renewable sources by 2012 are in the works in the U.S. and U.K. Innovators: Cobalt Biofuels, Dupont (backed by BP), Gevo, Tetravitae Bioscience Freshwater Usage:** N/A Energy Yield***: 90%

Process*: By swapping out natural genes for synthetic ones, scientists trick microorganisms such as E. coli and yeast into converting simple sugars to diesel, gasoline and jet fuel instead of into fats or alcohols. As in traditional ethanol production, microbes ferment the sugars (in this case, from sugar cane) in a slurry, but since finished fuels don’t mix with water, the hydrocarbons are easily separated by centrifuge without expensive distillation. Bottom Line: Designer fuels are ready to drop into engines, but unless they’re made in a closed-loop system, they’re water-intensive. The first commercial plant will be located in Brazil and is expected to start producing diesel in 2010. Innovators: LS9, Amyris Freshwater Usage:** 3 gallons Energy Yield***: 106%

Process*: Scientists have genetically engineered algae not just to turn CO2 into oil, but to continuously excrete that oil directly into the surrounding water. Since oil floats, harvesting it becomes simple work compared with the energy-intensive drying and extraction traditionally used for typical algae, which store oil within their cell walls. As with second-generation methods, the oil can then be processed into biodiesel. Bottom Line: If they can perform at scale, these mutant algae may well be game changers. Synthetic Genomics hopes to have commercial amounts of biodiesel on the market within five years, though no plants have been built yet. Innovators: Synthetic Genomics Freshwater Usage:** None Energy Yield***: 103%

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* May vary slightly from company to company. ** Gallons per gallon of fuel, based on early projections; amount may vary depending on final production process. *** Compared to a gallon of gasoline.