Ethanol boom-bust scares off investors-analyst

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WASHINGTON, Feb 27 (Reuters) – Investors burned by the recent boom and bust in the U.S. ethanol industry will be wary of pouring money into plants for the next generation of biofuels without more stable returns, a J.P. Morgan analyst said on Friday.

U.S. law requires that 10.5 billion gallons (40.8 billion litres) of ethanol be blended into the gasoline supply this year to reduce dependence on foreign oil imports and lower emissions of climate-changing greenhouse gases.

But ethanol producers have struggled to find profits amid volatile corn prices and plunging gasoline demand and prices.

Reuters UK