Coskata, a company hoping to revolutionize the fuel industry by producing the cellulosic ethanol for less than $1 per gallon, raised $19.5 million in a second round of funding, according to Private Equity Week. 

Investors in the round, which was announced in a regulatory filing by Coskata, included Globespan Capital Partners, General Motors, Capital Partners, Khosla Ventures, GreatPoint Ventures and Advanced Technology Ventures.

Coskata didn’t immediately return phone calls asking how it plans to spend the cash.

The Warrenville, Ill.-based company raised both eyebrows and hopes when it launched out of stealth mode in January with a partnership with automotive giant General Motors and a claim that its technology can create ethanol for less than $1 per gallon from any carbon-based material, including wood chips, construction waste and plastic bags (see With GM Deal in Hand, Coskata Promises $1 Ethanol).

The company has said that its production is "environmentally superior" to other techniques and will utilize "nontraditional" transportation methods that will help cut down on carbon emissions during shipping, another common gripe against ethanol.

The concept of ethanol as an alternative to oil-based fuel took a hit in early February after two studies published in the journal Science concluded that ethanol production will actually generate more greenhouse gases than traditional fossil fuels. The revelation went over like a fly in the ointment after the signing of a federal energy bill requiring the United States to use 36 billion gallons of ethanol by 2022.

But with the average price of ethanol typically hovering above $2 a gallon and average gasoline prices near $3 a gallon, Coskata’s cost of $1 per gallon sounds overly optimistic to critics and supporters alike.