The funding, officials said, will support development of enzymes -- a key step to enabling bio-based production of clean, renewable biofuels such as cellulosic ethanol.

The funding, part of President Bush’s Twenty in Ten Plan, seeks to displace 20 percent of U.S. gasoline usage by 2017 through diversification of clean energy sources and increased vehicle efficiency.

"These enzyme projects will serve as catalysts to the commercial-scale viability of cellulosic ethanol, a clean source of energy to help meet President Bush’s goal of reducing our reliance on oil," said Energy Department Assistant Secretary Andy Karsner.

"Ethanol from new feed stocks will not only give America more efficient fuel options to help transform our transportation sector, but increasing its use will help reduce greenhouse gas emissions," said Karsner.

The funding, with a minimum 50 percent industry cost-share, will total nearly $68 million to further enzyme commercialization efforts, officials said.

Letters of intent are due Sept. 10, with completed applications to be submitted by Oct. 20.