We worried last week that the credit crunch would hurt cleantech, and especially ethanol. Now this week there are two more additions to our ethanol death watch map, Visions Fuels in Iowa and Oklahoma Sustainable Energy, embedded below. In both cases the financial crisis on Wall Street was blamed for drying up investments.
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The capital-intensive business of ethanol production is getting hit hard as project financing slows to a trickle, and we expect to add more pins to our map. This could be the end for Vision Fuels, which announced today it had to cancel its Des Moines plant and lose a nearly $1 million deposit. Vision Fuels had originally planned on building three plants but abandoned plans for the two other plants in July.
Unfortunately, it’s not as if the developers who moved earlier and got funding before the collapse are fairing much better. Record corn prices and tumbling oil prices are squeezing already thin margins for grain-ethanol producers. Citigroup thinks three-quarters of all U.S. ethanol plants are at risk of closing.
In a separate twist, nepotism, conflict-of-interest laws and Missouri state politics have stalled incentives for an ethanol plant in Missouri.