Something stinks at Imperium Renewables, and it's not the Southeast Asian palm oil. In the last few weeks the company has shed its CEO, pulled back from a much anticipated initial public offering, and (this week) announced cuts to its corporate work force. Sam from HR and Diane from marketing are packing their cubicles, leaving the engineers to run the shop. Cutting back at corporate is like a late '90s internet company selling the Ferrari and the ping pong table - bouncing the unnecessary costs to keep the ship afloat. For a company once regarded as the boy genius of biofuel it is clear now Imperium is muddling its way through what can charitably be called Act II of Titus Andronicus. So the question remains, are things at Imperium as bad as they seem, or is another example of the growing pains many analysts expect green tech companies will experience as the market matures? For the answer, I offer a short trip down memory lane. In August 2007 Imperium opened its 100 million gallon capacity, $78 million biodiesel plant in Grays Harbor near Seattle. Operating at full production, Imperium anticipated controlling 40 percent of the U.S. biodiesel market by 2009. Current domestic production was pegged at 75 million gallons, with projections of 1 billion by the end of 2009. Imperium's initial calculation was based both on full production at Grays Harbor and an expected 300 million gallon capacity expansion at proposed plants in Hawaii, Pennsylvania, and Argentina that were expected to be completed by the end of 2008. To finance the expansion, Imperium filed an S-1 with the SEC in May 2007 announcing its intention to raise a $345 million IPO. $220 million would go to the new plants. The IPO, in addition to its previous $214 million in equity and debt financing, would have left the company enough capital to build the plants and maintain a steady flow of palm oil feedstock from Southeast Asia. Whoa! $100 oil! I bet Martin Tobias, Imperium's imperius ex-CEO, never saw

Regulatory scrutiny is beginning to fall over the $100 million a year carbon offset market. On January 8th the FTC held its first public hearing to investigate advertising and deceptive practices in the sale of carbon offsets to consumers. These include “double counting� of emissions reductions and investing in projects with little or no mitigation impact. The carbon offset market is effectively unregulated, with a handful of third parties buying, selling, and investing carbon offsets on behalf of consumers and companies alike. While some carbon offsets are effective, the vast majority are having a minimal or non existent impact on global emissions reduction, and primarily serve to provide a green veneer for crunchy consumers and corporations seeking to burnish their image during a slumping economy. Fraud, however, is not the real crime here. Companies like Dell, General Electric, and Delta Airlines, as well as the roughly 30 carbon offset intermediaries, are tapping into consumer desire to invest in carbon mitigation strategies. This is misplaced capital that could be going towards building renewable energy capacity, developing new green technologies, or buying energy efficient home appliances. Ultimately, environmentalism needs to realize its now a market, not a social movement, and we’re not playing with Monopoly money. The decisions companies and consumers make have real consequences, and the invested capital represents real opportunities, not charitable donations.