Mascoma Corp. sees promise in switchgass, a cellulosic ethanol feedstock.

The U.S. Department of Energy (DOE) recently announced plans to invest an additional $86 million over the next four years in three new cellulosic ethanol biorefineries. 

The money will go to Nicholasville, Ky.-based Ecofin; Boston-based Mascoma Corp., which received initial funding from Khosla Ventures and Flagship Ventures in early 2006; and RSE Pulp & Chemical, a company based in Old Town, Maine, whose investors include the University of Maine and American Process Inc . of Atlanta, Ga.

The money will go toward small-scale demonstration-scale biorefineries that will produce ethanol from cellulosic biomass sources, including corncobs, wood pulp and switchgrass. All three plant are slated for the East Coast.  Earlier this year, DOE selected four projects, including Pacific Ethanol Inc.'s (Nasdaq:PEIX) plant in Boardman, Ore., to receive up to $114 million in federal funding.

Trillium FiberFuels of Corvallis, Ore., in April received a DOE Small Business Innovative Research Grant to develop a technology processing cellulosic ethanol. The Trillium technology would improve ethanol yield from feedstocks. Upon receiving the award, Trillium president Chris Beatty said, "We are very pleased with this support and validation of our approach. We are excited about taking this technology to the next level."