THE renewable-fuel standard released in February by America's Environmental Protection Agency (EPA) paints an ambitious picture of biofuels' future. It wants the amount of the stuff used as transport fuel to climb from 13 billion gallons (49 billion litres) in 2010 to 36 billion gallons in 2022, requiring by far the largest part of that increase to come from various advanced biofuels, rather than ethanol made from corn (maize). But although the future looks exciting, the present is rather grim. The EPA has been forced to slash its 2010 mandate for the most widely touted of the non-corn biofuels, cellulosic ethanol, from 100m gallons to just 6.5m, less than a thousandth of the 11 billion gallons produced from corn in 2009.

The fact that corn-ethanol production has continued to grow, despite the failure of a number of firms in late 2008 and early 2009, points to the efficacy of the various protections and subsidies it enjoys (falling maize prices helped too), though it says nothing about their efficiency or wisdom. Ethanol, which is used mainly as an additive to petrol, is not a particularly good fuel: it offers only about two-thirds as much energy as petrol and can corrode pipelines and car engines. By 2014 or earlier, ethanol production is expected to reach 10% of America's total fuel demand, and thus to hit a “blend wall”, since the EPA does not at present allow blends of more than 10% for mainstream use.

Even as producers have urged the EPA to lift this bar, it has challenged them to move beyond corn and make ethanol from cellulose, the abundant, inedible portion of most crops. Using inedible inputs avoids fights about diverting food crops for fuel, and frees the industry from reliance on a single commodity. Despite ample investment, however, production costs remain high and commercialisation elusive. Since 2007 one company, Range Fuels, has received more than $150m in federal grants and guarantees for a large cellulosic-ethanol plant, but has yet to produce any. Still, it and others are gamely pushing ahead. A boost came last month, when Novozymes and Danisco, two Danish firms, unveiled new, cheaper enzymes which are needed to break down cellulose.

Even if cellulosic ethanol were to get cheaper, though, it would still be ethanol, a poor fuel. The alternative is to produce something better, such as an advanced biodiesel. According to Lux Research, based in Boston, venture capitalists invested $208m in algae technologies with this sort of thing in mind during 2008, six times as much as they spent in 2007. But building vast pools for algae and turning them into fuel remains tremendously expensive. Solazyme, a Californian firm, is a promising anomaly, using algae to make fuel from sugars in dark industrial vats rather than pools. Such strategies may work, but have yet to be scaled up. Solazyme, tellingly, has developed other sources of revenue.

America's government is doling out grants and loan guarantees, and oil companies are investing, too. Solazyme has a partnership with Chevron. Valero, America's biggest oil refiner, has bought up troubled ethanol plants and invested in firms that use plant material, algae and rubbish to produce fuel. BP's broad-based portfolio includes investments in Brazilian sugarcane ethanol, cellulosic ethanol and a partnership with DuPont to produce biobutanol. “It still feels like the final bets have not been made,” explains Phil New, the head of BP Biofuels.