GM invests in alternative fuel

WASHINGTON -- General Motors Corp. said Thursday it has taken an ownership stake in a renewable energy company that is working to develop ethanol from wood chips, waste paper sludge and switch grass.

It is the automaker's second partnership with an startup this year that is attempting to create an alternative fuel from something other than corn.

The extent of GM's investment and ownership stake in the companies has not been disclosed.

Mascoma Corp., based in Boston, is developing a single-step method of breaking down plant matter for fuel, hoping to reduce the cost.

GM said the new collaboration will further develop non-grain forms of ethanol for flexible-fuel vehicles, which run on a mix of gasoline and ethanol.

GM President and Chief Operating Officer Fritz Henderson said the investments underscored the company's belief that "ethanol has the greatest near-term potential as a clean-burning, renewable fuel that can help reduce oil dependence."