Half of General Motors output to use ethanol by 2012

In this photo released by General Motors (GM), GM North America vice president of design Bryan Nesbitt introduces the GMC Denali XT Concept Truck at the 2008 Chicago Auto Show on Wednesday in Chicago, Illinois. The vehicle is powered by the first combination of GM's two-mode hybrid system with an E85 ethanol-capable engine. The Denali XT Concept offers a 50 percent increase in combined fuel economy over comparable small pickup trucks running on gasoline. PHOTO: AFP

General Motors Corp (GM) says half of its US vehicle volume will run on ethanol by 2012, just as partner Coskata Inc is expected to be ramping up ethanol production.

In a speech on Wednesday at the Chicago Auto Show, GM North America president Troy Clarke said GM will have 11 ethanol-capable vehicles on the market this year and 15 in 2009. Clarke also announced that GM will be producing its first four-cylinder ethanol-capable model, the FlexFuel Chevrolet HHR, in 2010.

"We don't only want to respond to the needs of the market. We want to anticipate them," Clarke said.

Clarke said that Warrenville, Illinois-based Coskata, which announced its partnership with GM last month, has formed an alliance with ethanol plant engineering firm ICM Inc to build its first plant, expected to open in late 2010.

Coskata and chief executive Bill Roe said the firm plans to announce the location of that plant and another plant in the next few weeks, and construction on both will start this year. ICM's production process is being used for half of all US ethanol production.

Coskata it would be able to mass-produce ethanol at the plant for less than US$1 a gallon (3.8 liters) using a unique process that converts feedstock, biomass, agricultural waste and even municipal solid waste to ethanol.

Clarke GM is continuing to research hybrids, plug-in electric vehicles and other fuel-saving technology, but believed ethanol could provide the quickest reduction in emissions. The US already has a fueling infrastructure for ethanol and consumers would have to make minimal changes in behavior, he said.

Clarke that if GM, Ford Motor Co and Chrysler LLC meet their promises for the number of ethanol-capable vehicles they will have on the road by 2020, there would be a reduction of 110 billion liters of fuel annually, or 18 percent of the country's usage. GM now has 2.5 million ethanol-capable vehicles on the road and expects to have up to 20 million by 2020, Clarke said.

"Nothing else we can do gets even close to that kind of impact that soon," Clarke said.