General Motors Corp. said today that it has bought a stake in start-up biofuel company Coskata Inc. which has developed a commercially viable process to bring cellulose-based ethanol to the market in 2011.

Cellulosic ethanol production currently costs about double that of traditional U.S. ethanol, a plant-based distilled alcohol derived mostly from corn in the United States and from sugar in Brazil. reuters

According to the coskataenergy website website:

Coskata is a biology-based renewable energy company. Our technology enables the low-cost production of ethanol from a wide variety of input material including biomass, municipal solid waste and other carbonaceous material. Using proprietary microorganisms and patented bioreactor designs, we will produce ethanol for under US$1.00 per gallon.

What this means is that if someone is able to pull off a low cost cellulosic ethanol production method, the market for corn based ethanol and the recent acceleration in price for corn would drop.

General Motors already has many underutilized flex-fuel vehicles in the nation's vehicle fleet that could use ethanol if a viable method of low cost production was invented.