Taking stock in Colorado’s biofuels industry

The biofuels industry is faring better in Colorado than elsewhere, but bolder and more sustained actions are required if the state’s vision of becoming the clean-tech version of Silicon Valley is to be realized.

The biofuels industry is evolving rapidly. At last count, there are at least 17 different process technologies under development nationally, many of which have a presence in Colorado. Four key challenges exist: legislative, work force, capital markets and public awareness.


Conditions promoting long-term growth are needed at both national and local levels. In this race to own the New Energy Economy, simply starting first is not enough.

Federal energy policy should go beyond simple incentives and drive a wholesale rebalancing of the U.S. energy portfolio mix. National energy policies should build upon three principles: technology neutrality, feedstock independence and tax-incentive impartiality. The biofuels industry simply seeks a level playing field and fair competition.

The many technology pathways being pursued make it impossible for policy makers to predict which feedstocks, production technologies and renewable end-products will win in the market place. So why try? Wasted tax dollars will only result if policy makers don’t let the marketplace determine who wins the biofuels race.

In Colorado, a clear picture exists of what local business leaders require to transition their companies from research and development activities to commercial entities. Colorado needs a long-term master plan for development of the state’s biofuels industry.

This master plan would take a holistic approach at transforming the state’s biofuels competitiveness. A four-stepped approach, mirroring what business uses for long-range planning, would include:

• A rigorous resource assessment (physical, human, capital, technology).
• Benchmarking of state policies/development programs.
• Targeted improvement actions over the coming decade.
• Annual key performance indicators to flag where interventions are warranted.
Financial incentives need to be deployed more aggressively including clean-fuel advanced-technology grants, tax credits for alternative fuel production facilities and low-interest, state-backed construction bonds. Doing so will strengthen industry’s ability to transition from demonstration plants to thriving, profitable companies.


Biofuels firms in Colorado believe growing the supply of skilled employees is needed to build a clean-energy sector. Dramatically different knowledge, skills and abilities are essential to lead renewable energy firms compared with the fossil fuel competitors.

Emerging biofuels companies must understand how to scale new technologies, access capital markets and manage external stakeholders. More venues for learning such skills are needed, and they should target all workers.

Raising growth capital remains an urgent challenge. Creativity, innovation and leadership are essential to overcoming today’s funding void. Eighty percent of firms I know here want more guidance on accessing federal stimulus funds. This becomes even more urgent since President Obama’s budget includes $6 billion for investment in clean energy technologies.

Opportunities also lie in better connecting Rocky Mountain investors with emerging biofuels firms and radical ideas like a state venture capital fund for biofuels.

Colorado stands at a crossroads. It has many resources necessary for creating a globally recognized biofuels industry, but other states do as well. State leaders should take us down a path with a clear purpose and do so quickly despite the budget crunch facing the state.

We simply can’t afford to become complacent in this worldwide race to build a prosperous biofuels industry. Colorado needs to cross this finish line first – for the sake of energy independence and the generations ahead.

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