If all plants store energy in their cells, then why choose food crops for biofuel? There must be plenty of other plants that produce energy without driving up the price of pasta. And it turns out that there are. Everything from wood chips to grass clippings to "energy crops" like switchgrass and jatropha are potential biofuel sources. But unlocking their energy is tricky. Whereas corn starch is easy to break down into alcohol, the potential energy in many other plants is located in their cellulose, which, along with lignin, forms the tough cell walls of stalks and leaves. Because cellulose and lignin evolved to protect cells from the elements and predators, they don't break down easily. But nature has its ways. Soil bacteria use enzymes to digest plant matter, cows and other ungulates have second stomachs full of microorganisms that turn grass and leaves into energy, and termite guts work similar transformations on wood. So it's doable. The challenge is to do it cheaply and on an industrial scale.

In general terms, cellulosic ethanol is produced by first treating grass, wood chips, or whatever with chemicals to break down the cell walls and expose the cellulose. Then enzymes, called cellulases, are added to convert the cellulose to sugars. Add yeast or bacteria to ferment the sugars into ethanol, then refine and purify it, and you've got your fuel. Every step in this process is well understood, scalable, and cheap-except the one involving cellulase. The enzymes used today to make cellulosic ethanol are descended from a tropical fungus named Trichoderma reesei that was discovered during World War II, consuming soldiers' tents in the South Pacific. Today's selectively bred versions are faster, but not sufficiently so. Commercially produced cellulases are adequate for high-margin work like fading blue jeans, but they are far too slow and expensive to make commercial-scale fuel. So the race is on to find-or build-the perfect cellulase. Researchers are scouring rain forests and garbage dumps for microorganisms that may have already found a solution. Others are trying to evolve and/or engineer better microorganisms in the lab. And they're devoting serious resources to the search: Denmark-based Novozymes, the world's leading supplier of cellulases, has a team of over 100 researchers focused exclusively on cellulosic enzymes. The Holy Grail of this effort is a bug that does it all, eating cellulose and excreting ethanol or other fuels, a process called consolidated bioprocessing. And-par for the clean-tech course-promising results are pouring out of labs around the world. Several groups claim to have lowered the cost of ethanol from $5 a gallon to $1 in the past few years.

Other researchers are going chemical rather than biological, using techniques borrowed from oil refining and petrochemicals to release the energy in cellulose, in some cases turning it into fuels like diesel that are easier to transport and use than ethanol. Variations of two general approaches are being tried: One mixes the material with steam to produce "synthesis gas" (also called syngas or synthgas), consisting of hydrogen and carbon monoxide. With additional processing, syngas can be converted to liquid fuels. The second approach involves creating a product that resembles oil that can then be refined into liquid fuel.