WEST LAFAYETTE, Indiana (August 29, 2006) - The next phase of the state's ethanol policy will focus on making Indiana the leader in next generation biofuels development and production, Governor Mitch Daniels announced today.

"The first phase of our biofuels policy, corn-based ethanol production, has been a clear success, achieving our goals way ahead of schedule. Now that we've come from behind to leadership in first generation biofuels, we want to be second to none in the next generation," said Daniels during opening remarks to participants at the Richard G. Lugar-Purdue University Summit on Energy Security.

In less than 18 months, 12 new ethanol plants have been announced for Indiana. Once in full production, those plants are expected to increase the state's total ethanol production to 1.3 billion gallons, surpassing the state's 2008 biofuels production goal of 1 billion gallons. Daniels said the state will continue to support those facilities through transportation infrastructure and workforce training, but will start to focus on development of new technologies.

"We will begin to shift the state's production assistance to the cellulosic and biomass fuels of the future," said Daniels.

Corn-based ethanol plants are experiencing a financial boom with most returning their investment two years or less. That return on investment has driven plans for the current plants announced in Indiana and has fueled many more on the drawing board.

The state has used all $50 million authorized by the Indiana General Assembly for Clean Energy Indiana Production Credits. The governor will ask the next legislature to help fund the development, production, and transportation of new biofuels, including new production credits restricted to cellulosic and biomass technologies.

For biofuels to compete head-to-head with petroleum-based products, they must be as easy to move and to use as petroleum-based products. Daniels said the state will continue to support industry efforts to develop transportation networks similar to those used for petroleum.

Additional media contact: Department of Agriculture, Deb Abbott, 317/232-8767, dabbott@isda.in.gov