BEIJING — General Motors is focusing its research and development of alternative fuels on new biofuels, apparently pinning hopes on them as the most feasible short-term solution to help replace fossil fuels. At the core of biofuel development is cellulosic ethanol, a fuel that GM says could cost less than $1 per gallon.Cellulosic ethanol can be produced from wood waste, switchgrass and garbage. Coskata, a GM partner in developing biofuels, will test production of cellulosic ethanol derived from agricultural and municipal solid waste beginning in mid-2009. A full-scale production facility is expected to open in 2011.Mascoma, another alternative-fuel producer, has begun testing its 'consolidated bio-processing' method that lowers production costs by reducing the additives and enzymes needed to process fuel. GM claims that production costs for cellulosic ethanol are less than $1 per gallon, not including the cost of building the production facility.Part of GM's alternative-fuel plan is a focus on China as a primary location to introduce and produce new fuels. China is currently the world's third-largest ethanol producer, behind the U.S. and Brazil. To date, GM has built more than 5 million flex-fuel vehicles that can run on ethanol. By 2012, the company intends to make half its lineup flex-fuel ready.Inside Line says: Hydrogen and electricity may be in the alternative-fuel limelight right now, but GM is banking on new forms of ethanol to provide the short-term answer. — Eric Tingwall, Correspondent