A Department of Agriculture reports suggests that after two decades of research into cellulosic ethanol with no technical breakthroughs, that algae biofuel and oil crops should get the funding.
One problem with cellulosic is the logistics in getting hundreds of tons of agricultural waste (or crops grown specifically for ethanol) on a daily basis to the processing plant. However, cellulosic ethanol does work fine if sited where the feedstock is, like at a paper processing plant.
The future in biofuel increasingly looks like it will be algae.