Today, Toyota and Isuzu announced a collaboration which will be made possible by the former purchasing a 5.9 percent stake (100 million shares) in the latter. The two companies said in a public statement that the deal will allow them to work together in the research and development in three areas of green car technology. According to Automotive News (subscription required), Isuzu will take the lead in the development of small diesel engines and diesel emissions control while Toyota spearheads alternative-fuel drivetrains and environmental technologies for gas engines.

It seems as though most of the industry can't help but see an impending omen in the announcement. Just seven months ago, GM sold off the entirety of its stake (7.9 percent) in Isuzu in an effort to focus on falling profits in North America. And now, as Toyota makes one of GM's old alliances its own, the Japanese giant also gears up in an attempt to overtake GM as the world's number one automaker.

There's currently no word on the price of the deal, but it should hover somewhere around $354 million. "You have my word on it."

[Source: Associated Press via International Herald Tribune]

There has undoubtedly been a lot of noise from both sides of the ethanol argument. Putting it simply, proponents of the biofuel see it as a way to ween the country off foreign oil while critics question its sustainability and energy balance. Friday's news from VeraSun, the nation's second largest ethanol producer, is surely bound to mix things up.

VeraSun announced that they would build the first large-scale commercial biodiesel production facility which uses oil extracted from distiller grains, a co-product of ethanol production, as its feedstock. That's right. Two biofuels from the same source. Unfortunately, no mention was made of feasibility studies or energy balance calculations, but TradingMarkets.com is reporting that VeraSun has contracted with Lurgi PSI for design and engineering services as well as Crown Iron Works Company for oil extraction equipment.

Construction on the 30 million-gallon-per-year facility is to begin in 2007 and production should start in 2008.

[Source: Associated Press via Netscape Money and Business]

The Associated Press is reporting that last Tuesday researchers at Volkswagen unveiled the first viable high-temperature fuel cell (HTFC) for passenger vehicles. In theory, the benefits of an HTFC over the more common low-temperature fuel cell would allow it to run more efficiently while demanding less from the environment.

Typically a low-temperature fuel cell runs at 176 degrees Fahrenheit whereas VW's high-temperature version can run at levels as high as 248. Because of this the HFTC doesn't need the complex, expensive cooling system required by the less tolerant LTFC. Also, the HFTC is lighter, more compact, more stable and cheaper than the LTFC. Juergen Leohold, head of Volkswagen's corporate research, went as far as to say, "we no longer give much chance to low-temperature fuel cells going into series production."

VW says the new fuel cell design could be used in passenger cars by 2020. I wonder if that'll give us enough time to clean our electricity grid and figure out how to make hydrogen in an environmentally friendly fashion.

[Source: Associated Press via International Herald Tribune]

Chart: Google Finance / VeraSun Energy Corporation (NYSE: VSE)

Apparently, all's not well in the market for the booming ethanol industry. After showing a strong performance in the second quarter, ethanol producer companies' stock prices slid a considerable amount during the third quarter. According to a report produced by analyst Friedman Billings Ramsey, ethanol stocks fell in correlation with ethanol market prices, 41 and 55 percent, respectively. Pacific Ethanol and VeraSun Energy sank 39 percent, Andersons fell 18 percent while Archer Daniels Midland lost just 8 percent.

The poor performance even kept some ethanol producers out of the market for the time being. Hawkeye Holdings, for instance, postponed their initial public offering citing unfavorable market conditions.

Investors are now keeping a keen eye on quarterly earnings announcements. ADM will release their earnings on October 31, VeraSun on November 7, Andersons on November 11 and Pacific Ethanol will announce their quarterly earnings on November 15.

[Source: Associated Press via Houston Chronicle]

The Associated Press, in a story published today, sees in the recent statements of two agri-giant chairmen the broader debate of whether or not farmland should be used to grow food or fuel.

Recently, Cargill's CEO and chairman Warren Staley said farmland should be used to grow, "Food first, then feed and last fuel." The next day, G. Allen Andreas, the chairman of ADM, said the world can grow plenty of food, and that hunger and famine are the result of infrastructure and capital problems around the world. ADM and Cargill both produce ethanol from their crops, and ADM's stock price has recently jumped up because of the market's attraction to ethanol. Cargill is privately held, according to the article. Neither chairman elaborated on their statements.

[Source: InForum]