GM America has Second Thoughts on Ethanol

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Holden's decision to invest in ethanol has been called into question by the company's parent in the US, with General Motors chief executive officer Dan Akerson claiming it will ''die'', despite the company's history with the renewable fuel.

Holden has spent millions of dollars converting its 3.0-litre V6 and 6.0-litre V8 engines to run on ethanol, as well as brokering a partnership with Caltex to introduce the fuel at service stations throughout the country.

It is also part of a consortium, supported by the Victorian government, that will build a plant to convert household waste into ethanol within the next three years.

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But speaking to The Detroit News, Akerson said ethanol was ''going to die slowly'', as other alternative fuels earned greater consumer acceptance.

Holden spokeswoman Emily Perry says Akerson's comments will not affect the local operation's decision to push ahead with ethanol.

''Our commitment to ethanol hasn't changed,'' she says, adding Holden's partnership with Caltex and ethanol producer Coskata also remains unchanged.

The trio have formed a company, Flex Ethanol Australia, to establish the local production facility. Commercial testing of the waste-to-fuel technology has already been done in the US ahead of the start of production in Australia.

Ethanol is also out of favour with General Motors' European brand Opel. It is investing in compressed natural gas (CNG) across its model range instead of ethanol.

''We are serious about [CNG],'' Opel director of technology communications Andrew Marshall says. ''More serious than ethanol.''

Akerson wants General Motors to invest in CNG as well as other emerging technologies, including electric and hybrids.

But he dismisses hydrogen fuel-cell vehicles as too expensive and lacking infrastructure, despite the company's ongoing development of the technology. General Motors is now up to its fourth generation fuel cell but they remain prototypes.

''In the next 10 years, this company has to break the code on advanced propulsion and that's going to be a multifaceted solution,'' Akerson says.

In the short-term, he believes cars that use a small petrol engine to supplement an electric motor - such as the Chevrolet Volt, to go on sale in Australia next year wearing a Holden badge - will become widely accepted.

He says that technology will be ''old, old technology and old news'' within five years.

Perry says Holden is unlikely to consider CNG because of the availability and affordability of LPG in the local market.

''When we look at alternative fuels, we never rule anything out,'' she says.

''But our focus in Australia is ethanol and LPG.''

My Comment "sugar only goes in my coffee,not my car"