(ICCT) Measuring and Addressing Investment Risk in the Second-Generation Biofuel Industry

MEASURING AND ADDRESSINGThis paper aims to assess the financial risk of second-generation biofuel companies, identify other barriers to commercialization of the industry, and suggest ways to
address these issues. First, this introduction explains the Renewable Fuel Standard and outlines the current status of the industry. The next section describes existing regulatory incentives for second-generation biofuel production. This is followed by an analysis of financial volatility and risk in second-generation biofuel companies and how they and other factors may limit investment. Last, this paper presents recommendations for revising existing financial incentives to reduce financial risk and spur investment in second-generation biofuel companies, to help bring them through the valley of death and into successful and sustainable commercial operation.