COLLEGE PARK, Md. -- Researchers at the University of Maryland have unveiled a new biomass-to-ethanol process that takes advantage of a bacterium found in the Chesapeake Bay two decades ago.

Enzymes produced by the bacteria, which was found breaking down bay grass, can also digest cellulose in other plant matter, a key step in the ethanol production process.

A university startup company, Zymetis Inc., has been created to commercialize the process, the university said.

Gov. Martin O'Malley toured the group's lab on Monday and presented them with a $50,000 grant, saying Marylanders are leading the nation in scientific discovery and innovation.

The group's motto is that fuel from trash is better than fuel from food. Rather than use corn, which costs more than $5 per bushel, they can create ethanol from the stuff you find in a trash can.

"We believe we have the most economical way to make the novel, efficient enzymes needed to produce biofuels from cellulosic material," Zymetis founder Steve Hutcheson, a chemistry professor on leave from the university, said in a statement prepared for release Monday.

Hutcheson said enzymes produced by the strain of bacteria break down cellulose faster than any other products currently available, producing sugars that can be fermented into ethanol at lower cost.

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Ethanol, a form of alcohol, is a fuel produced mainly from corn in the U.S., but scientists have been trying to develop alternatives that use nonfood sources for energy. Ethanol is currently used primarily as an additive to gasoline rather than a fuel alternative, due in part to a strong demand for corn by the food industry, Hutcheson said.

Last summer, the U.S. Energy Department announced that new research centers in Tennessee, Wisconsin and California will try to develop new ways of turning switchgrass, poplar trees and other plants into fuel under a $375 million plan.

The new research centers are part of the Bush administration's plan to reduce gasoline consumption by 20 percent during the next decade. The centers will study biomass plants such as switchgrass, poplar trees and corn stalks used for cellulosic ethanol.

Zymetis and Fiberight, a company that processes cellulosic waste products including paper not normally collected as part of existing recycling programs, plan to open an ethanol plant by the end of the year.

Researchers said they believe the technology could ultimately produce 75 billion gallons of carbon-neutral ethanol each year.

Zymetis is also working to genetically engineer a yeast strain, using genes from the bay-derived bacterium, to improve the fermentation of sugars derived from cellulosic materials.