Dupont invests in cellulosic ethanol

The U.S. chemicals giant announced a $140 million joint venture with a Danish company to produce ethanol from non-food sources. It could be a valuable fuel source, but don't expect corn prices to drop just yet.

SAM EATON: CEO Charles Holliday is calling it the largest opportunity he's seen in his 35 year career at DuPont.

Charles Holliday: We see at least a $75-billion market opportunity sometime in the next decade.

DuPont has partnered with Danish firm Danisco. Its goal is to produce commercially viable ethanol from old corn stalks and sugarcane waste within three years. It's called cellulosic ethanol because the energy comes from the woody stems of plants instead of valuable ears of corn. Holliday says that's what makes it so attractive in a time of surging food prices.

Holliday: Clearly, when you're seeing corn at these prices that are multitudes higher than we've ever expected or seen in the past, if we can find a cellulosic way to meet the need -- it's a win, win, win.

If DuPont pulls this off it would be a first, and it could eventually drive a boom in non-food biofuel crops like switchgrass. But don't expect that to ease food prices. Ken Cook with the Environmental Working Group says even switchgrass has to grow somewhere.

Ken Cook: It's really not so much what is grown on the land, but the land that it's grown on.

Cook says as long as agricultural lands are being used for energy production instead of food, the two formerly separate economies will be closely linked. And he says with hundreds of millions of dollars of infrastructure for corn-based ethanol already in place, any meaningful shift away from that would take years.