Is the ethanol bubble about to burst?

Hot on the heals of news from the US that ethanol plants are being mothballed (Grand Forks Herald) siting the high cost of feedstock and low ethanol sales and plans for construction halted (CNNMoney.com) following lower ethanol prices and news reports of a short term excess of ethanol production capacity we get news of similar activities here in Australia.

The ABC is reporting that Agri Energy has halted plans to build two ethanol plants in Swan Hill and Murtoa, Western Victoria because of market difficulties and a lack of Government and community support for alternative fuels.

In a separate article we learn that Agri Energy has also decided not to build an ethanol plant in Condoblin, New South Wales following a restructure announcement and will not be going ahead with any of its development plans in Australia. Instead, the company says it has decided to invest outside of Australia.

It will be interesting to watch what happens to the ethanol plants planned for Casino, New South Wales (previous post) and a feasibility study underway for another plant in Geelong, Victoria (previous post).

Source: ABC News

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