A very interesting piece here which explores the ethanol stock universe and some of the surrounding issues in the industry according to analysts.

Of particular note is the current fragmentation of the ethanol market. ADM (Archer Daniels Midland), the biggest, is the only producer with double-digit market share - that's according to Merrill Lynch analyst Diane Geissler.

And Bear Stearns analyst Ann Duignan said she noticed attendees at a recent industry workshop seemed to recognize that rising corn prices and falling ethanol futures indicate tougher margins ahead.

Clean Air Power which closed today at 86.5 has the technology to combine gas with diesel. Petrol or gasoline dual fuel systems are quite common - I have one myself on my car. But with diesel it is just not done. That's what makes this company's technology unusual as well as the fact that it is geared to the US freight market, whereas LPG and dual fuel LPG tend to run off domestic cars.

Amex-listed Xethanol closed down today at 8.79.

The company is unusual in that it's philosophy is to make ethanol not out of America's corn - concentrated in the Midwest. They think the demand for ethanol is actually on the Atlantic, Gulf and Pacific coasts many thousands of miles away. iInstead, their approach is to produce ethanol as near to urban centres as possible with local biomass. Take the waste to the solution, not the solution to the waste is their marketing soundbite.

In recent months, the company has been as high as 16.18. And of interest is that they are diversifying into biodiesel.

One week after its IPO, China Biodiesel International, a company that makes biodiesel - profitably - from waste oil closed up today on London's AIM near 2% at 106p. This waste oil is collected by suppliers and includes old cooking oil, expired oil from grain depots waste oil from animal fats. The company has 16 suppliers both local and national. It also imports waste palm oil from Malaysia.

Some people - like NY Times columnist Thomas L. Friedman - believe that China will be forced to become the first country to go green on a massive scale. Although the Chinese economy is growing at 10% p.a., some figures suggest it is losing 2% from environmental damage.

See these video clips of a seminar with Friedman and Senator Luger that discuss this and other issues.

Certainly, this article in the NY Times seems to think so, based in no small part by the successful acquisition of Aventine Renewable Energy for $66m by Morgan Stanley which is allegedly now worth $750m.

Since going public, Aventine's performance has not been spectacular - far from it. Business Week has picked up on this. See their article IPOs to approach with caution.

NYSE listed Aventine is currently trading at $39.18.