An “ideal ethanol” feedstock from "cellulosic ethanol" is seen as a second generation, "way of the future" feedstock that can be commercialized by the Philippines in the next five to 10 years.

A memorandum of agreement (MoA) between the Philippine Council for Advanced Science and Technology Research and Development (PCASTRD) and the the National Institute of Molecular Biology and Biotechnology (NIMBB) will be signed to carry out a P10 million, five-year program toward the commercial availability of cellulosic ethanol.

Cellulosic ethanol is believed to be an ideal biofuel feedstock as it uses waste materials that normally do not have economic value. It uses non-food part of crops, non-food crops like grasses, or industrial waste like wood chips, skin and pulp. This makes food security a non-issue compared to other feedstocks like corn, sugarcane, and cassava.

"It does not compete with food resources. Since cellulose cannot be digested by humans, its production does not compete with food. In comparison, sugar and starch-based ethanol are from a variety of food crops (and) require vast agricultural lands and input," said Dr. Fidel Rey P. Nayve Jr., program leader of the "Fuel Ethanol Production from lignocellulosic Feedstocks."

Authorities are trying to develop a local technology for this as cellulosic ethanol is already produced on a large-scale basis in the United States, Canada, and Europe.

Raw materials for it are abundant and grow with hardly any production cost. Producing it does not leave any waste since plants – wood, straw – are made up mainly of cellulose, so that "the whole plant can be harvested."

"The Philippines has plenty of agricutural residues such as rice straw, rice hulls, sugarcane bagasse, corn stover, and corn cobs as well as potential energy crops like cogon grass and talahib," according to Nayve as reported by a report of Mervin John C. De Roma.

Aside from eliminating substantial waste, the process of producing ethanol from cellulosic materials helps reverse the adverse effects of climate change and may even earn carbon credits for its producers. A United States Department of Energy study indicated that cellulosic ethanol cuts off greenhouse gas emission by 85 percent "over reformulated gasoline," according to De Roma.