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May 08, 2007

Bio Product Implications

With all the good press that corn derived products such as biodegradable plastics and fuel substitues/enhancers such as ethanol I wonder if we have overlooked the big picture. I've read in more than one financial report that ethanol plants, biobased products and the companies that produce them are not as good of an investment that one may think.

Apparently, ethanol production is subsidized by governments so that the industry can get 'up & running' so to speak. Without the government subsidies this industry could hardly survive on its own. The problem is that it costs so much more to produce an ethanol type fuel then the current cost of traditional fuels.

I've also seen this high cost of production reflected in the high price of biodegradable plastics and bio-based materials that use vegetable based esters and byproducts as raw materials. And what do you think will happen to the price of these products if the price of the vegetable base goes up? I wonder what the implications are for other biobased packaging or biobased products based on for example, soybean derived products?

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