The U.S. Environmental Protection Agency (EPA) has dramatically reduced its 2011 cellulosic ethanol production target.

In 2007, EPA proposed year-by-year volume requirements for various types of renewable fuel, aiming for 23 billion total gallons by 2022, the amount mandated in the Energy Independence and Security Act of 2007. The cellulosic ethanol target for 2011, initially 250 million gallons, now is 5-17.1 million gallons.

“Overall, EPA remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead,” says the agency in a news release.

The Renewable Fuels Association (RFA), the national ethanol industry trade group, points out that several cellulosic ethanol companies have cancelled or delayed expansion plans due to financing difficulties.

“EPA’s estimates underscore the need for the Department of Energy and USDA to construct loan guarantee programs that work for cellulosic ethanol companies,” writes Matt Hartwig, RFA’s communications director. “As the RFA has repeatedly pointed out … current and proposed loan guarantee programs have flaws that prevent cellulosic ethanol producers from taking full advantage of these important programs. As such, a lack of available investment has slowed the deployment of these technologies at a time when they are becoming most necessary.”